Flex Ltd (FLEX)

Short-term

Turnover ratios

Flex Ltd's inventory turnover ratio has varied over the years, decreasing from 5.76 in 2021 to 3.47 in 2022, and then gradually increasing to 4.66 in 2025. This indicates that the company is taking longer to sell its inventory in recent years compared to the past.

On the other hand, the receivables turnover ratio has shown an increasing trend, improving from 5.69 in 2021 to 7.03 in 2025. This suggests that Flex Ltd is collecting its receivables more efficiently, converting its accounts receivable into cash at a faster rate.

The payables turnover ratio has been fluctuating, with a dip in 2022 followed by an increase in subsequent years, reaching 4.60 in 2025. This indicates that the company is taking varying lengths of time to pay its suppliers.

In terms of working capital turnover, there has been some volatility in the ratio over the years. The ratio decreased from 6.84 in 2021 to 5.52 in 2023, before recovering and reaching 8.63 in 2025. This reflects the efficiency of Flex Ltd in generating sales revenue relative to the working capital invested.

Overall, analyzing these activity ratios provides insights into Flex Ltd's management of its inventory, receivables, payables, and working capital, which are crucial components of its operational efficiency and financial performance.

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Average number of days

Flex Ltd's days of inventory on hand (DOH) have shown a fluctuating trend over the past five years, decreasing from 105.09 days as of March 31, 2022, to 78.25 days as of March 31, 2025. This suggests an improvement in managing inventory levels efficiently, which can lead to lower holding costs and potentially higher inventory turnover.

In terms of days of sales outstanding (DSO), there was a decrease in the number of days it takes to collect receivables from 64.17 days as of March 31, 2021, to 51.91 days as of March 31, 2025. A lower DSO indicates quicker collection of accounts receivable, which can improve liquidity and cash flow for the company.

On the other hand, the number of days of payables has been somewhat inconsistent, ranging from 66.43 days as of March 31, 2024, to 99.89 days as of March 31, 2022. This metric reflects the average number of days it takes for Flex Ltd to pay its suppliers. A higher number of days of payables may indicate that the company is able to take advantage of trade credit terms or is facing challenges in managing its payables effectively.

Overall, Flex Ltd has shown improvements in managing its inventory and accounts receivable efficiently over the past years, which can positively impact its working capital management and financial performance in the long run.

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Long-term

Flex Ltd's fixed asset turnover has shown fluctuations over the years, declining from 11.50 in March 2021 to 8.92 in March 2022, before rising to 12.13 in March 2023. The values for March 2024 and March 2025 are not available.

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. A higher ratio indicates that the company is generating more revenue per dollar invested in fixed assets. The increase in fixed asset turnover from 2022 to 2023 suggests that Flex Ltd improved its efficiency in utilizing its fixed assets to generate sales during that period.

In comparison, the total asset turnover ratio, which indicates how effectively a company is using its assets to generate revenue, declined from 1.52 in March 2021 to 1.27 in March 2022, before gradually increasing to 1.40 in March 2025.

Overall, analyzing both ratios together can provide a more comprehensive view of Flex Ltd's long-term activity efficiency, illustrating how well the company is utilizing both fixed and total assets to generate sales over the years.