EPAM Systems Inc (EPAM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | 101.79 | 106.53 | 99.96 | 170.04 | 190.04 |
| Working capital turnover | 1.90 | 2.36 | 2.49 | 1.83 | 2.10 |
EPAM Systems Inc's activity ratios provide insights into how efficiently the company manages its resources and operations.
1. Receivables Turnover:
- The receivables turnover ratio indicates how many times EPAM collects its accounts receivable during a period.
- The trend shows a consistent collection of accounts receivable, with a slight dip in 2021 followed by an increase in 2022 and 2023.
- Overall, EPAM has been effective in managing its accounts receivable turnover, which is crucial for maintaining healthy cash flows.
2. Payables Turnover:
- The payables turnover ratio measures how many times EPAM pays its suppliers during a period.
- The company shows a significant decrease in payables turnover from 2020 to 2023, indicating a longer time to pay suppliers.
- This could be due to changes in payment terms with suppliers or increased reliance on internal resources to fund operations.
3. Working Capital Turnover:
- The working capital turnover ratio reflects how efficiently EPAM utilizes its working capital to generate revenue.
- There is a fluctuating trend in working capital turnover over the years, with the ratio peaking in 2022.
- A high working capital turnover ratio indicates that EPAM effectively utilizes its current assets to support operations and generate revenue.
In conclusion, while EPAM Systems Inc demonstrates strong efficiency in managing its accounts receivable, there are areas of potential improvement regarding payables turnover and working capital turnover. Monitoring and optimizing these ratios can help the company enhance its overall operational efficiency and financial performance.
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | 3.59 | 3.43 | 3.65 | 2.15 | 1.92 |
The activity ratios for EPAM Systems Inc indicate the efficiency with which the company manages its inventory, collects its receivables, and pays its creditors.
Days of Inventory on Hand (DOH) is not provided in the data table, which makes it difficult to assess how quickly the company is able to turn its inventory into sales. Typically, a lower DOH indicates efficient inventory management.
Days of Sales Outstanding (DSO) have shown a declining trend from 2019 to 2021, with a slight increase in 2022 and a decrease again in 2023. This ratio represents the average number of days it takes for the company to collect its accounts receivable. The decreasing trend is favorable as it indicates that the company is collecting its receivables more quickly over time.
Number of Days of Payables reflects how long it takes the company to pay its suppliers. EPAM Systems Inc has shown an increasing trend in this ratio from 2019 to 2021, with a slight decrease in 2022 and then an increase in 2023. The increasing trend in payables days may suggest that the company is taking longer to settle its payables, which could indicate improved cash flow management or potentially strained supplier relationships.
Overall, from an activity ratio perspective, EPAM Systems Inc has shown some mixed trends in the efficiency of managing its inventory, collecting receivables, and paying payables over the years. Each ratio provides insight into a different aspect of the company's operations and working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 19.81 | 17.34 | 15.88 | 15.66 | 13.81 |
| Total asset turnover | 1.07 | 1.18 | 1.06 | 0.98 | 1.02 |
The long-term activity ratios of EPAM Systems Inc provide insight into the efficiency of the company's utilization of its fixed assets and total assets over the years.
The fixed asset turnover ratio has shown a consistent increasing trend from 13.88 in 2019 to 19.96 in 2023. This indicates that the company generated $19.96 in revenue for every dollar invested in fixed assets in 2023, showcasing improved efficiency in utilizing fixed assets to drive revenue generation.
On the other hand, the total asset turnover ratio fluctuated over the years, with a general increasing trend from 0.98 in 2020 to 1.08 in 2023. This implies that the company generated $1.08 in revenue for every dollar of total assets in 2023, indicating enhanced efficiency in generating revenue from its overall asset base.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios highlights EPAM Systems Inc's ability to efficiently utilize its assets to generate revenue, signaling positive operational performance and effective asset management strategies over the years.