Etsy Inc (ETSY)

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	111.12	92.01	85.42	76.34	53.19
Payables turnover	27.70	25.89	23.37	11.37	10.30
Working capital turnover	3.20	2.91	3.21	1.20	1.12

Inventory turnover is missing from the provided data, comparing the rest of the activity ratios for Etsy Inc over the past five years reveals some noteworthy trends.

The receivables turnover has been consistently increasing over the period from 53.19 in 2019 to 111.12 in 2023. This indicates that Etsy has been collecting its accounts receivable more efficiently each year.

In terms of payables turnover, there has also been a steady increase from 10.30 in 2019 to 27.70 in 2023. This suggests that Etsy is taking longer to pay off its suppliers, which could potentially indicate improved cash flow management or potentially strained supplier relationships.

The working capital turnover has fluctuated over the years, with a peak of 3.21 in 2021 and a slight decrease to 3.20 in 2023. This ratio indicates how effectively the company is using its working capital to generate sales. A higher ratio suggests good efficiency in the utilization of working capital.

Overall, the increasing trends in receivables turnover and payables turnover ratios are positive signs of financial health for Etsy Inc. Efficient management of receivables and payables can contribute to improved cash flow and overall liquidity.

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	3.28	3.97	4.27	4.78	6.86
Number of days of payables	days	13.18	14.10	15.62	32.11	35.45

Days of inventory on hand (DOH) provides insight into how efficiently the company manages its inventory. Unfortunately, the data for this ratio is not provided for our analysis.

Days of sales outstanding (DSO) shows the average number of days it takes for the company to collect revenue after making a sale. A decreasing trend is generally positive, indicating faster collection of receivables. In this case, DSO has improved steadily over the years from 6.86 days in 2019 to 3.28 days in 2023, suggesting that Etsy has been able to enhance its collections process and efficiently convert sales into cash.

Number of days of payables represents the average number of days the company takes to pay its suppliers. A higher number of days indicates the company is taking longer to pay its bills, which can potentially be a sign of good cash management. However, a significant increase in this ratio could also indicate strained relationships with suppliers. In this scenario, the number of days of payables has decreased from 35.45 days in 2019 to 13.18 days in 2023, indicating that Etsy has been paying its suppliers more promptly as compared to the prior years.

Overall, based on the available data, Etsy Inc has shown improvement in its collections process and has been managing its payables more efficiently over the past few years. However, the lack of information on days of inventory on hand limits a comprehensive assessment of the company's overall activity ratios.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	17.80	17.39	14.04	27.73	3.99
Total asset turnover	1.02	0.97	0.61	0.72	0.53

Etsy Inc's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insight into how efficiently the company is utilizing its assets to generate sales.

Starting with the fixed asset turnover ratio, we observe a generally increasing trend from 2019 to 2023, indicating that Etsy has been improving its efficiency in generating revenue from its fixed assets over the years. In 2023, the fixed asset turnover ratio stands at 11.00, indicating that the company generated $11 in sales for every $1 invested in fixed assets. This suggests strong efficiency in utilizing fixed assets to drive revenue growth.

Moving on to the total asset turnover ratio, we see fluctuations over the years but an overall increasing trend from 2019 to 2023. In 2023, the total asset turnover ratio stands at 1.02, meaning that Etsy generated $1.02 in sales for every $1 of total assets. This indicates that the company is effectively leveraging its total asset base to generate sales, reflecting operational efficiency and better asset utilization.

Overall, the upward trends in both the fixed asset turnover and total asset turnover ratios suggest that Etsy Inc has been improving its efficiency in utilizing both fixed and total assets to drive sales growth and generate revenue, which is a positive indicator of the company's operational performance in the long term.