Flex Ltd (FLEX)
Activity ratios
Short-term
Turnover ratios
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.66 | 4.45 | 4.39 | 4.24 | 4.14 | 3.95 | 3.86 | 3.72 | 3.73 | 3.51 | 3.42 | 3.46 | 3.66 | 3.95 | 4.57 | 5.28 | 5.76 | 5.89 | 5.98 | 6.29 |
| Receivables turnover | 7.03 | 6.37 | 6.38 | 7.94 | 8.56 | 6.98 | 6.86 | 6.97 | 7.09 | 6.67 | 6.37 | 6.30 | 6.69 | 6.56 | 6.56 | 6.33 | 5.69 | 5.57 | 5.79 | 6.46 |
| Payables turnover | 4.60 | 4.66 | 4.66 | 5.24 | 5.75 | 5.09 | 4.83 | 4.76 | 4.91 | 4.15 | 3.88 | 3.74 | 3.85 | 3.93 | 4.04 | 4.31 | 4.28 | 4.23 | 4.28 | 4.77 |
| Working capital turnover | 8.63 | 6.88 | 6.46 | 7.56 | 6.31 | 5.35 | 5.61 | 6.19 | 5.87 | 7.16 | 8.20 | 7.60 | 7.18 | 7.13 | 7.31 | 7.05 | 6.84 | 6.50 | 6.95 | 8.38 |
Flex Ltd's activity ratios provide insights into the efficiency of its operations.
1. Inventory Turnover: This ratio measures how many times the company's inventory is sold and replaced over a period. Flex Ltd's inventory turnover has been decreasing gradually from 6.29 in June 2020 to 4.66 in March 2025. This indicates that the company is holding onto its inventory for a longer period before selling it, which may tie up its working capital.
2. Receivables Turnover: This ratio gauges how many times the company collects its accounts receivable during a period. Flex Ltd's receivables turnover has fluctuated over the years but generally shows an increasing trend, reaching 7.03 in March 2025, implying that the company is collecting its outstanding receivables more efficiently.
3. Payables Turnover: Payables turnover measures how often a company pays off its suppliers. Flex Ltd's payables turnover has been fluctuating, but it generally shows a decreasing trend from 4.77 in June 2020 to 4.60 in March 2025. This could indicate that the company is taking more time to pay its suppliers, potentially impacting its relationships with them.
4. Working Capital Turnover: This ratio indicates how efficiently a company generates revenue relative to its working capital. Flex Ltd's working capital turnover has shown fluctuations, with a notable decrease from 8.38 in June 2020 to 5.35 in December 2023, followed by an increasing trend to 8.63 in March 2025. A higher ratio suggests better utilization of working capital to generate sales.
Overall, the analysis of Flex Ltd's activity ratios suggests areas of strength in terms of receivables management and working capital efficiency, while highlighting potential concerns regarding inventory management and payment practices to suppliers. It would be beneficial for the company to focus on improving inventory turnover and payables turnover to optimize its operational efficiency and working capital management.
Average number of days
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 78.25 | 81.93 | 83.21 | 86.05 | 88.21 | 92.34 | 94.60 | 98.04 | 97.88 | 104.01 | 106.57 | 105.54 | 99.62 | 92.46 | 79.82 | 69.14 | 63.36 | 61.93 | 61.05 | 58.06 |
| Days of sales outstanding (DSO) | days | 51.91 | 57.28 | 57.23 | 45.99 | 42.66 | 52.28 | 53.19 | 52.36 | 51.48 | 54.69 | 57.30 | 57.92 | 54.52 | 55.68 | 55.66 | 57.69 | 64.17 | 65.53 | 63.01 | 56.47 |
| Number of days of payables | days | 79.42 | 78.25 | 78.31 | 69.65 | 63.52 | 71.71 | 75.62 | 76.73 | 74.40 | 87.98 | 94.05 | 97.54 | 94.68 | 92.99 | 90.32 | 84.77 | 85.35 | 86.38 | 85.31 | 76.60 |
Based on the provided data, the activity ratios of Flex Ltd can be analyzed as follows:
1. Days of Inventory on Hand (DOH):
- The days of inventory on hand for Flex Ltd have shown an increasing trend over the last few years, which indicates that the company is holding onto its inventory for a longer period before selling it. This could be due to various reasons such as slower sales, overproduction, or inefficient inventory management.
2. Days of Sales Outstanding (DSO):
- The days of sales outstanding have fluctuated over the years but generally have been decreasing. A lower DSO indicates that Flex Ltd is collecting its receivables more quickly, which is a positive sign as it implies efficient credit management and timely collection of cash from customers.
3. Number of Days of Payables:
- The number of days of payables for Flex Ltd has shown some fluctuations but overall has been decreasing. A lower number of days of payables suggest that the company is taking less time to pay its suppliers, which could be indicative of strong supplier relationships or improved cash management practices.
In summary, Flex Ltd should focus on managing its inventory levels effectively to avoid overstocking and potential obsolescence. Additionally, continuing the trend of reducing days of sales outstanding and maintaining a balanced approach to managing payables will contribute to improving the overall efficiency of the company's operations.
Long-term
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | — | — | — | — | — | — | 10.23 | — | 12.92 | 12.98 | 10.22 | 12.67 | 9.43 | 9.31 | 9.42 | 9.32 | 11.50 | 11.13 | 10.96 | 10.72 |
| Total asset turnover | 1.40 | 1.40 | 1.41 | 1.53 | 1.54 | 1.44 | 1.43 | 1.45 | 1.42 | 1.42 | 1.39 | 1.35 | 1.35 | 1.40 | 1.53 | 1.56 | 1.52 | 1.49 | 1.54 | 1.64 |
The fixed asset turnover ratio of Flex Ltd has shown some fluctuations over the years, ranging from a high of 12.98 in December 2022 to a low of 9.31 in December 2021. This ratio measures how efficiently the company is using its fixed assets to generate sales. An increasing trend in the fixed asset turnover ratio indicates that the company is generating more sales from its fixed assets, which is generally a positive sign.
On the other hand, the total asset turnover ratio of Flex Ltd has also displayed variability, with values ranging from 1.35 in March 2022 to 1.64 in June 2020. This ratio reflects the company's ability to generate sales from all its assets. A higher total asset turnover ratio indicates that the company is effectively utilizing all its assets to generate sales revenue.
Overall, while fluctuations in both fixed asset turnover and total asset turnover ratios are observed, it is important to look at these ratios in conjunction with other financial metrics and industry benchmarks to assess the company's long-term performance and efficiency in asset utilization.