Fair Isaac Corporation (FICO)

Short-term

Turnover ratios

Fair, Isaac Corp.'s activity ratios indicate the efficiency of the company in managing its assets and liabilities. The receivables turnover reveals a gradual decrease from 4.27 in 2022 to 3.90 in 2019, indicating a slightly declining efficiency in collecting receivables. However, the payables turnover has shown an increasing trend, reaching 16.36 in 2023 from 14.57 in 2019, implying that the company is taking longer to pay its suppliers.

The working capital turnover, while not available for 2021, has exhibited a decline from 10.83 in 2020 to 8.02 in 2023, indicating a decrease in the utilization of working capital to generate sales revenue.

It is important for the company to closely monitor its receivables and payables turnover, as well as its working capital turnover, to ensure efficient management of resources and maintain a healthy cash flow.

---

Average number of days

Days of inventory on hand (DOH) is not provided in the table, so we are unable to analyze this metric for Fair, Isaac Corp. The Days of Sales Outstanding (DSO) increased from 85.44 days in 2022 to 93.55 days in 2023, indicating that it took the company longer to collect its accounts receivable in 2023. This may be a cause for concern as it implies a potentially slower cash conversion cycle.

On the other hand, the Number of Days of Payables decreased from 20.86 days in 2022 to 22.31 days in 2023. This suggests that the company's accounts payable turnover increased slightly, meaning it took fewer days to pay its suppliers. However, it's important to note that a very low number of days may indicate overly aggressive or even unsustainable management of payables.

Overall, the increase in Days of Sales Outstanding and the small decrease in Number of Days of Payables in 2023 may indicate a potential strain on the company's working capital and liquidity. Further analysis of cash conversion cycle and working capital management is recommended to fully understand the company's activity ratios and their impact on its financial health.

---

Long-term

The long-term activity ratios of Fair, Isaac Corp. provide insights into the company's efficiency in managing its fixed and total assets over the years. The fixed asset turnover ratio has shown a consistent increase from 2019 to 2023, indicating that the company is generating higher sales from its fixed assets. This signifies improved efficiency in utilizing its long-term assets to generate revenue.

The total asset turnover ratio has remained relatively stable at around 0.81 to 0.96 from 2019 to 2023. This suggests that the company is consistently generating sales in relation to its total assets over the years, indicating a steady performance in asset utilization.

Overall, the increasing trend in the fixed asset turnover ratio and the stable total asset turnover ratio reflect a positive long-term activity performance for Fair, Isaac Corp., with the company efficiently utilizing its assets to generate revenue.