Fulgent Genetics Inc (FLGT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 31.71 | 58.89 | 17.66 | 5.45 | 50.93 |
| Receivables turnover | 5.51 | 8.53 | 7.07 | 2.09 | 4.95 |
| Payables turnover | 12.03 | 10.92 | 10.52 | 3.39 | 8.92 |
| Working capital turnover | 0.67 | 1.15 | 1.96 | 1.07 | 0.98 |
The activity ratios of Fulgent Genetics Inc provide insight into the company's efficiency in managing its resources and operations.
Inventory turnover has shown significant fluctuations over the years, indicating varying levels of efficiency in managing inventory levels. The sharp increase in 2022 was followed by a substantial decrease in 2023, which suggests potential inventory management challenges or changes in sales patterns.
Receivables turnover has generally shown a positive trend, indicating the company's ability to efficiently collect payments from customers. The gradual increase in receivables turnover reflects improved credit management practices or a more effective accounts receivable process.
Payables turnover has also exhibited fluctuations, with an overall increasing trend. This suggests that the company has been extending its payment terms with suppliers or negotiating better payment terms, leading to a more efficient management of its accounts payable.
Working capital turnover measures how effectively the company is utilizing its working capital to generate revenue. The declining trend observed in this ratio may indicate a decrease in the efficiency of the company's working capital management over the years.
Overall, these activity ratios highlight Fulgent Genetics Inc's ongoing efforts to optimize its operations and financial performance through improved inventory management, efficient collection of receivables, and better management of payables.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 11.51 | 6.20 | 20.67 | 67.02 | 7.17 |
| Days of sales outstanding (DSO) | days | 66.20 | 42.80 | 51.60 | 174.55 | 73.73 |
| Number of days of payables | days | 30.34 | 33.44 | 34.71 | 107.65 | 40.91 |
Based on the activity ratios of Fulgent Genetics Inc over the past five years:
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows fluctuations, with significant variations from 2019 to 2021, ranging from 67.02 days to 20.67 days.
- In 2022, there was a notable decrease in DOH to 6.20 days, indicating improved inventory management efficiency.
- The decrease in DOH in 2022 suggests that the company was able to sell its inventory faster, potentially leading to better working capital management.
2. Days of Sales Outstanding (DSO):
- DSO for Fulgent Genetics Inc has also varied significantly over the past five years.
- In 2020, DSO spiked to 175.43 days, indicating a prolonged time to collect accounts receivable, which could impact cash flow.
- The trend improved in 2021 and 2022, with DSO declining to 52.61 days and 44.29 days, respectively, suggesting better receivables management.
- However, DSO increased again in 2023 to 64.53 days, signaling a longer collection period compared to the prior year.
3. Number of Days of Payables:
- Fulgent Genetics Inc's days of payables have shown fluctuations over the five-year period.
- The decrease in days of payables from 2019 to 2020 (40.91 days to 107.65 days) could indicate a change in the company's payment terms or strategy.
- In 2022 and 2023, the number of days of payables decreased to 33.44 days and 30.34 days, respectively, compared to the previous years, suggesting faster payment processing or improved supplier relationships.
Overall, the analysis of Fulgent Genetics Inc's activity ratios shows varying levels of efficiency in managing inventory, collecting accounts receivable, and paying suppliers over the past five years. The company should aim to maintain a balance between these ratios to optimize its working capital and cash flow management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.47 | 7.61 | 15.94 | 10.49 | 5.44 |
| Total asset turnover | 0.23 | 0.45 | 0.78 | 0.60 | 0.37 |
Fulgent Genetics Inc's long-term activity ratios reveal the company's efficiency in utilizing its fixed and total assets to generate revenue over the years. The fixed asset turnover ratio has fluctuated significantly, indicating varying levels of utilization of the company's fixed assets. In 2023, the ratio stands at 3.47, reflecting a decrease from the previous year but still showing a relatively efficient use of fixed assets to generate sales.
On the other hand, the total asset turnover ratio has also exhibited fluctuations but generally indicates that Fulgent Genetics Inc has been less efficient in utilizing its total assets to generate revenue compared to its fixed assets. The ratio has ranged from 0.23 to 0.78 over the past five years, with a significant increase in 2021 followed by a slight decline in 2023.
Overall, while the company has shown varying levels of efficiency in utilizing its fixed and total assets to generate sales, maintaining a focus on improving asset turnover ratios could help enhance operational efficiency and profitability in the long term. Further analysis of the underlying factors contributing to these fluctuations would be necessary to make informed strategic decisions regarding asset utilization and operational performance.