Fair Isaac Corporation (FICO)

Short-term

Turnover ratios

The activity ratios of Fair, Isaac Corp. provide insights into the efficiency of the company's operations and management of working capital.

Receivables turnover indicates how efficiently the company collects on credit sales. The ratio has shown a slight decline from 4.54 in December 2022 to 4.21 in March 2023, indicating a longer collection period. However, it has remained relatively stable around 4 in the recent quarters.

Payables turnover demonstrates how quickly the company is paying its suppliers. The ratio has fluctuated, with a peak at 22.82 in March 2023 and a low of 16.36 in September 2023. This suggests variations in the company's payment practices.

Working capital turnover reflects how efficiently the company is using its working capital to generate sales. The ratio has varied significantly, from a low of 8.02 in September 2023 to a high of 15.25 in June 2022. This suggests fluctuations in the company's ability to generate sales relative to its working capital.

Overall, the analysis of these activity ratios indicates that Fair, Isaac Corp. has shown some variability in its efficiency in managing receivables, payables, and working capital turnover, which may warrant further investigation into the company's operational processes and management of working capital.

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Average number of days

To analyze Fair, Isaac Corp.'s activity ratios, we can use the following formulas:

1. Days of Inventory on Hand (DOH) = (Average Inventory / Cost of Goods Sold) * 365
2. Days of Sales Outstanding (DSO) = (Accounts Receivable / Total Credit Sales) * 365
3. Number of Days of Payables = (Accounts Payable / Cost of Goods Sold) * 365

However, from the given table, it appears that data for the Days of Inventory on Hand (DOH) is not available. As a result, we will analyze the Days of Sales Outstanding (DSO) and the Number of Days of Payables.

DSO shows the average number of days it takes for a company to collect revenue after a sale. A higher DSO typically indicates that a company is taking longer to collect payment from its customers, which could lead to potential cash flow issues.

Looking at Fair, Isaac Corp.'s DSO over the past eight quarters, we observe a fluctuating trend, with the DSO ranging from 73.78 days to 95.19 days. The increase in DSO from the fourth quarter of 2022 (73.78 days) to the second quarter of 2023 (95.19 days) suggests a potential deterioration in the company's collection process.

The Number of Days of Payables indicates how long a company takes to pay its suppliers. A longer number of days of payables may indicate the company's ability to hold onto cash for a longer period before settling its debts.

Fair, Isaac Corp.'s number of Days of Payables has also varied over the past eight quarters, ranging from 15.99 days to 22.31 days. A decrease in the number of days of payables, as seen from the first to the fourth quarter of 2023, may suggest an improvement in the company's ability to manage its payables effectively.

Overall, these activity ratios provide insight into Fair, Isaac Corp.'s management of its working capital and the efficiency of its sales and collection processes. It would be prudent to closely monitor these ratios to assess the company's operational effectiveness and potential impact on its cash flow.

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Long-term

Fair, Isaac Corp.'s long-term activity ratios provide insights into the efficiency of the company's use of its long-term assets. The fixed asset turnover ratio measures the company's ability to generate sales from its fixed assets. The trend shows a consistent increase in the fixed asset turnover ratio, indicating that the company is becoming more efficient in utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio assesses the company's efficiency in generating sales from all its assets. The trend in the total asset turnover ratio shows slight fluctuations, but overall, it has remained relatively stable over the analyzed period.

Based on these ratios, it appears that Fair, Isaac Corp. has been effectively utilizing its fixed assets to generate sales and has maintained a steady level of efficiency in generating sales from its total assets. However, it's important to consider other factors such as industry benchmarks and company-specific strategies when evaluating the significance of these ratios.