FTI Consulting Inc (FCN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 46.03 | — | 31.92 | 28.58 | 32.04 |
| Receivables turnover | 2.22 | 2.38 | 2.59 | 2.39 | 1.98 |
| Payables turnover | 108.39 | 101.95 | 118.34 | 127.45 | 83.66 |
| Working capital turnover | 5.27 | 4.09 | 4.26 | 5.36 | 4.16 |
The activity ratios provide insights into how efficiently FTI Consulting Inc. manages its assets and liabilities to generate revenue.
1. Receivables Turnover:
- The receivables turnover ratio indicates how many times a company collects its accounts receivable during a specific period. FTI Consulting's receivables turnover has been relatively stable over the past five years, ranging from 3.04 in 2023 to 3.51 in 2021. This suggests that the company is efficient in collecting payments from clients.
2. Payables Turnover:
- The payables turnover ratio measures how many times a company pays its suppliers during a period. FTI Consulting's payables turnover has been fluctuating, with a notable increase to 108.39 in 2023 from 83.66 in 2019. A higher payables turnover may indicate that the company is effectively managing its accounts payable and optimizing its cash flow.
3. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently a company utilizes its working capital to generate revenue. FTI Consulting's working capital turnover has also shown variability over the years, with a peak of 5.36 in 2020. A higher working capital turnover suggests that the company is effectively utilizing its current assets to drive sales.
Overall, FTI Consulting Inc. demonstrates solid efficiency in managing its receivables and payables, as indicated by stable receivables turnover and improved payables turnover. The working capital turnover ratios also reflect the company's ability to utilize its working capital effectively to generate revenue.
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 | 7.93 | — | 11.43 | 12.77 | 11.39 |
| Days of sales outstanding (DSO) | days | 164.20 | 153.11 | 140.75 | 152.52 | 184.62 |
| Number of days of payables | days | 3.37 | 3.58 | 3.08 | 2.86 | 4.36 |
FTI Consulting Inc.'s activity ratios provide insights into the efficiency of the company's operations and management of working capital. The Days of Sales Outstanding (DSO) measure indicates the average number of days it takes for the company to collect revenue from its customers. FTI Consulting Inc. experienced an increasing trend in DSO from 2019 to 2023, indicating that the company took longer to collect payments from customers over the years. This may suggest potential issues with credit policies or collection processes.
Days of Inventory on Hand (DOH) data was not provided for the years, therefore, we are unable to assess the efficiency of inventory management by the company. A decreasing trend in DOH would typically indicate the company is selling inventory more quickly, whereas an increasing trend would signal potential inventory management problems.
The Number of Days of Payables metric reveals the average number of days it takes for the company to pay its suppliers. FTI Consulting Inc. showed a fluctuating trend in the number of days of payables from 2019 to 2023. Decreasing days of payables may suggest more efficient cash management but could also indicate strained relationships with suppliers if payments are being made too quickly.
Overall, analyzing these activity ratios can help stakeholders evaluate FTI Consulting Inc.'s effectiveness in managing its working capital, collection practices, and relationship with suppliers for a more comprehensive view of the company's operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 21.85 | 19.74 | 19.53 | 24.22 | 25.12 |
| Total asset turnover | 1.05 | 0.93 | 0.90 | 0.89 | 0.85 |
FTI Consulting Inc.'s fixed asset turnover has shown a relatively stable trend over the past five years, with values ranging from 19.53 to 25.12. The ratio indicates that the company generates significant revenue relative to its investment in fixed assets, reflecting efficient asset utilization.
In terms of total asset turnover, FTI Consulting Inc. has exhibited an improving trend from 0.85 in 2019 to 1.05 in 2023. This suggests that the company is generating more revenue for each dollar of total assets held, indicating enhanced efficiency in utilizing its total asset base to drive sales.
Overall, both ratios indicate effective asset management and suggest that FTI Consulting Inc. is efficiently leveraging its assets to generate revenue and support its operations.