Flex Ltd (FLEX)

Activity ratios

Short-term

Turnover ratios

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 Mar 31, 2020 Dec 31, 2019
Inventory turnover 4.36 4.23 4.14 4.14 4.03 3.88 3.96 3.65 3.57 3.61 3.82 4.11 4.76 5.50 6.01 6.19 6.28 6.60 6.34 6.75
Receivables turnover 7.45 9.14 9.22 8.10 7.86 8.01 8.06 7.51 7.19 — 7.69 7.26 — — 5.86 5.72 6.06 7.06 9.92 8.29
Payables turnover 4.64 5.23 5.74 5.33 5.04 4.96 5.11 4.32 4.05 3.90 4.02 4.09 4.21 4.49 4.46 4.44 4.49 5.01 4.70 4.58
Working capital turnover 6.45 7.54 6.28 5.32 5.57 6.15 5.84 7.13 8.17 7.57 7.15 7.10 7.28 7.02 6.82 6.48 6.94 8.37 12.89 13.77

Flex Ltd's activity ratios provide insights into how efficiently the company manages its assets and liabilities.

1. Inventory turnover: Flex Ltd's inventory turnover ratio has been relatively stable, ranging from 3.57 to 6.75 over the past eight quarters. This indicates that the company is effectively managing its inventory levels, with a higher turnover suggesting faster sales or production cycles.

2. Receivables turnover: Flex Ltd's receivables turnover ratio has shown some fluctuations, varying between 5.72 and 9.22. A higher turnover ratio implies that the company is collecting its accounts receivable more quickly, which is favorable for cash flow management.

3. Payables turnover: Flex Ltd's payables turnover has also been consistent, ranging from 3.90 to 5.74. A higher payables turnover ratio indicates that the company is paying its suppliers more quickly, which could potentially impact relationships with vendors.

4. Working capital turnover: Flex Ltd's working capital turnover ratio has fluctuated between 5.32 and 13.77. A higher turnover ratio suggests that the company is efficiently utilizing its working capital to generate sales revenue, which can be a sign of operational efficiency.

Overall, the analysis of Flex Ltd's activity ratios indicates that the company has been generally effective in managing its assets and liabilities to support its operations and financial performance.

Average number of days

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 Mar 31, 2020 Dec 31, 2019
Days of inventory on hand (DOH) days 83.63 86.27 88.24 88.21 90.59 94.01 92.20 99.87 102.24 101.19 95.54 88.83 76.63 66.36 60.73 58.93 58.12 55.28 57.56 54.07
Days of sales outstanding (DSO) days 48.98 39.93 39.58 45.04 46.47 45.58 45.27 48.61 50.75 — 47.46 50.31 — — 62.31 63.84 60.24 51.73 36.78 44.01
Number of days of payables days 78.70 69.83 63.54 68.50 72.41 73.58 71.43 84.48 90.22 93.52 90.81 89.33 86.72 81.36 81.81 82.19 81.22 72.93 77.67 79.70

Analyzing the activity ratios of Flex Ltd over the specified periods, we observe trends in its operational efficiency:

1. Days of Inventory on Hand (DOH): The trend in DOH shows an increase from 54.07 days in Dec 2019 to 102.24 days in Sep 2022, before declining to 83.63 days in Sep 2024. This indicates that Flex has been maintaining inventory for a longer period before selling it, which may tie up working capital.

2. Days of Sales Outstanding (DSO): The DSO trend fluctuates, with peaks at 63.84 days in Dec 2020 and 62.31 days in Mar 2021, and dips such as 36.78 days in Sep 2020. The reduction in DSO indicates an improvement in collecting receivables efficiently.

3. Number of Days of Payables: The trend in payables days shows an increase from 72.93 days in Dec 2019 to 93.52 days in Jun 2022, followed by a decrease to 78.70 days in Sep 2024. This suggests that Flex might be taking longer to pay its suppliers, potentially affecting relationships but positively impacting its cash flow.

Overall, Flex Ltd should continue monitoring and managing its activity ratios to ensure optimal operational efficiency and liquidity management.

Long-term

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 Mar 31, 2020 Dec 31, 2019
Fixed asset turnover 11.58 12.11 12.33 12.55 12.83 12.76 12.87 12.92 12.93 12.61 12.20 12.00 12.12 12.08 11.47 11.10 10.94 10.70 10.91 11.29
Total asset turnover 1.40 1.52 1.53 1.43 1.42 1.44 1.41 1.42 1.38 1.34 1.34 1.39 1.52 1.56 1.52 1.49 1.54 1.64 1.77 1.76

Flex Ltd's long-term activity ratios indicate how efficiently the company is utilizing its assets to generate sales. The fixed asset turnover ratio has shown a relatively stable trend over the past few quarters, ranging between 10.70 and 12.93. This ratio measures the ability of the company to generate sales from its fixed assets, such as equipment and property. A higher fixed asset turnover ratio suggests that Flex Ltd is effectively using its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has fluctuated more over the same period, but generally trending upwards, with values ranging from 1.34 to 1.77. This ratio reflects how efficiently the company is using all of its assets, including both fixed and current assets, to generate sales. An increasing total asset turnover ratio indicates that Flex Ltd is becoming more efficient in utilizing its total assets to generate sales.

Overall, the steady performance of the fixed asset turnover ratio and the increasing trend of the total asset turnover ratio suggest that Flex Ltd is efficiently managing its assets to drive sales growth. However, further analysis and comparison with industry benchmarks may provide more insights into the company's operational efficiency and asset utilization.