Exelixis Inc (EXEL)

Short-term

Turnover ratios

Exelixis Inc's activity ratios provide insights into the efficiency of the company's management of its assets and liabilities over a five-year period.

1. Inventory Turnover:
- The inventory turnover ratio measures how many times the company sells and replaces its inventory within a specific period. Exelixis Inc's inventory turnover has shown a fluctuating trend over the years, increasing from 15.72 in 2020 to 29.77 in 2024. This implies that the company has been able to sell its inventory at a faster rate in recent years, indicating efficient inventory management.

2. Receivables Turnover:
- The receivables turnover ratio assesses how quickly a company collects outstanding receivables from its customers. Exelixis Inc's receivables turnover has varied over the years, with a slight decrease in 2021 followed by gradual increases in subsequent years. The improvement in this ratio indicates that the company has been collecting its receivables more efficiently.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers for goods and services purchased on credit. Exelixis Inc's payables turnover has shown fluctuations but overall an increasing trend. This suggests that the company has been managing its payables effectively, with an increasing pace of payment to suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently a company utilizes its working capital to generate sales revenue. Exelixis Inc's working capital turnover has been on a rising trend, increasing from 0.80 in 2020 to 2.04 in 2024. This indicates that the company has been able to utilize its working capital more effectively to drive sales growth.

Overall, the analysis of Exelixis Inc's activity ratios suggests improvements in inventory management, receivables collection, payables management, and working capital utilization over the five-year period, highlighting the company's increasing efficiency in managing its operational activities.

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Average number of days

Exelixis Inc's activity ratios provide insights into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, Exelixis holds inventory before selling it. A lower DOH indicates efficient inventory management.
- Over the period from December 31, 2020, to December 31, 2024, the DOH decreased from 23.22 days to 12.26 days. This trend suggests that Exelixis improved its inventory turnover and reduced the time it takes to sell inventory.

2. Days of Sales Outstanding (DSO):
- The DSO indicates how long it takes for Exelixis to collect payments from its sales. A lower DSO is favorable as it shows efficient accounts receivable management.
- Exelixis's DSO fluctuated over the period, with a peak of 71.90 days on December 31, 2021, and a low of 44.67 days on December 31, 2024. This indicates some variability in the company's ability to collect receivables efficiently.

3. Number of Days of Payables:
- This ratio measures how long Exelixis takes to pay its suppliers. A longer period indicates a more extended time to pay off debts.
- The number of days of payables ranged from 19.48 days on December 31, 2021, to 26.17 days on December 31, 2020. Generally, Exelixis maintained a relatively stable payment period to its suppliers during the analyzed period.

Overall, Exelixis Inc's activity ratios reflect improvements in inventory management efficiency and stability in accounts payable. However, there is slight variability in the collection of receivables, indicating room for further optimization in this area.

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Long-term

Exelixis Inc's long-term activity ratios indicate the efficiency with which the company utilizes its assets to generate sales. The fixed asset turnover ratio, which measures the company's ability to generate sales from its fixed assets, has shown a generally positive trend over the years, increasing from 14.66 in 2020 to 18.16 in 2024. This suggests that Exelixis has been able to generate more revenue for each dollar invested in fixed assets, indicating improved operational efficiency.

In contrast, the total asset turnover ratio, reflecting the company's ability to generate sales from all its assets, has shown fluctuations over the same period. It increased from 0.46 in 2020 to 0.74 in 2024, with peaks and troughs in between. This fluctuation may indicate variations in the company's asset utilization efficiency over the years.

Overall, the increasing trend in fixed asset turnover and the fluctuating trend in total asset turnover suggest that Exelixis has been effective in optimizing the utilization of its fixed assets to drive sales growth. However, the fluctuation in total asset turnover warrants further investigation into the company's asset management strategies to ensure sustained efficiency in generating revenue from all its assets.