Enphase Energy Inc (ENPH)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.77 | 9.06 | 11.12 | 10.26 | 12.57 |
| Receivables turnover | 5.14 | 5.29 | 4.14 | 4.25 | 4.29 |
| Payables turnover | 10.61 | 10.84 | 7.27 | 5.90 | 7.01 |
| Working capital turnover | 1.20 | 1.43 | 1.35 | 1.94 | 2.08 |
The activity ratios of Enphase Energy Inc indicate the company's efficiency in managing its assets and working capital over the past five years.
1. Inventory turnover: The trend shows a decline from 2019 to 2023, indicating that the company is holding onto inventory for a longer period. This may suggest potential issues with sales or operations efficiency.
2. Receivables turnover: The trend is relatively stable over the years, indicating that Enphase is collecting its accounts receivable efficiently. However, there was a slight decrease in 2021, which may require further investigation.
3. Payables turnover: The trend shows an increasing pattern over the years, which signifies that Enphase is taking longer to pay its suppliers. This might indicate improved cash flow management, but could also lead to strained supplier relationships if not managed effectively.
4. Working capital turnover: The trend is decreasing from 2019 to 2023, suggesting that Enphase's working capital is being utilized less efficiently to generate revenue. A lower turnover ratio implies that the company may be holding onto excess working capital, which could potentially be invested or used more effectively elsewhere.
Overall, Enphase Energy Inc's activity ratios reflect various aspects of its operational efficiency and working capital management, highlighting areas that may require attention to improve overall performance and profitability.
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 | 63.26 | 40.29 | 32.81 | 35.58 | 29.03 |
| Days of sales outstanding (DSO) | days | 71.06 | 69.04 | 88.11 | 85.86 | 85.01 |
| Number of days of payables | days | 34.40 | 33.66 | 50.17 | 61.86 | 52.04 |
To evaluate Enphase Energy Inc's efficiency in managing its inventory, accounts receivable, and accounts payable, we analyze the activity ratios over the past five years.
1. Days of Inventory on Hand (DOH):
The trend in Enphase Energy's DOH indicates an increasing trend from 29.03 days in 2019 to 63.26 days in 2023. This suggests that the company is holding inventory for a longer period, which could tie up working capital and impact cash flow.
2. Days of Sales Outstanding (DSO):
Enphase Energy's DSO has fluctuated over the years but remains relatively stable around the 70-90 day range. The slight increase from 85.01 days in 2019 to 71.06 days in 2023 indicates an improvement in collecting receivables more efficiently.
3. Number of Days of Payables:
Enphase Energy has managed to reduce its number of days of payables from 52.04 days in 2019 to 34.40 days in 2023. This signifies the company is paying its creditors more promptly, which could enhance relationships and potentially leverage favorable credit terms.
Overall, Enphase Energy has shown a mixed performance in managing its activity ratios. While there is room for improvement in inventory management, the company has been successful in collecting receivables more quickly and optimizing its payables practices. Monitoring and maintaining these ratios at optimal levels can help enhance operational efficiency and cash flow management in the future.
See also:
Enphase Energy 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 | 13.62 | 20.93 | 16.82 | 18.02 | 21.58 |
| Total asset turnover | 0.68 | 0.76 | 0.66 | 0.65 | 0.88 |
The fixed asset turnover ratio measures how efficiently a company generates revenue from its fixed assets. Enphase Energy Inc's fixed asset turnover has been varying over the past five years, ranging from 13.62 to 21.58. A higher fixed asset turnover indicates that the company is effectively utilizing its fixed assets to generate sales.
On the other hand, the total asset turnover ratio reflects how well a company utilizes all its assets to generate sales. Enphase Energy Inc's total asset turnover has also fluctuated over the period, with values ranging from 0.65 to 0.88. A lower total asset turnover may suggest that the company is not efficiently utilizing its total assets to generate sales compared to its fixed assets.
Overall, Enphase Energy Inc has shown relatively high fixed asset turnover ratios compared to total asset turnover ratios over the past five years. This indicates that the company is efficiently utilizing its fixed assets to generate revenue, though there may be room for improvement in optimizing the utilization of its total assets for generating sales. Investors and stakeholders may consider monitoring these ratios to assess the company's asset efficiency and operational performance.