Grid Dynamics Holdings Inc (GDYN)

Short-term

Turnover ratios

Grid Dynamics Holdings Inc has shown fluctuating trends in its activity ratios over the past few years.

1. Inventory Turnover: The company's inventory turnover has displayed significant variability over the reporting periods. It started at a high of 218.80 in March 2020, dropped to 31.49 in March 2022, and then slightly recovered to 13.62 in September 2023, indicating potential issues with managing inventory efficiently.

2. Receivables Turnover: The data provided does not include any values for the receivables turnover ratio, suggesting that Grid Dynamics Holdings Inc may not track this metric or that the company does not have considerable accounts receivable turnover to report.

3. Payables Turnover: Similar to receivables turnover, there are no values provided for the payables turnover ratio. This may indicate that the company does not focus on managing its payables turnover actively, or it has a different approach to managing its payables.

4. Working Capital Turnover: The working capital turnover ratio has shown a fluctuating but relatively stable trend over the years. Starting at 0.92 in March 2020, it peaked at 1.74 in June 2021 before settling around 1.1 in the most recent periods. This indicates that the company has been efficient in generating revenue relative to its working capital investment.

In conclusion, Grid Dynamics Holdings Inc should focus on addressing the fluctuations in its inventory turnover and consider implementing strategies to improve inventory management efficiency. Monitoring and potentially improving the payables turnover ratio could also be beneficial for optimizing working capital usage.

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Average number of days

Based on the data provided, let's analyze the activity ratios of Grid Dynamics Holdings Inc:

1. Days of Inventory on Hand (DOH):
- The company's inventory turnover has been fluctuating over the years. In March 2020, the company held inventory for 1.67 days, which increased to 5.80 days by September 2020, then decreased to 1.73 days by December 2021. However, there was a significant increase in inventory holding days to 21.97 days by March 2023, followed by a further increase to 29.75 days by June 2023.
- The sharp increase in DOH in 2023 suggests potential issues with inventory management and could indicate slower inventory turnover, tying up more cash in inventory.

2. Days of Sales Outstanding (DSO):
- The data for DSO is unavailable for all periods, indicating that the company's accounts receivable turnover and collections efficiency cannot be assessed using this ratio.
- Without DSO data, it is challenging to evaluate the company's effectiveness in collecting receivables promptly.

3. Number of Days of Payables:
- Similar to DSO, the data for the number of days of payables is not available for any periods. This prevents an analysis of how long the company takes to pay its suppliers and manage its trade credit relationships.
- Lack of payables data limits the understanding of the company's liquidity management and the extent to which it leverages credit from suppliers.

In conclusion, the trend in Grid Dynamics Holdings Inc's DOH indicates fluctuations in inventory management efficiency over the years. However, the unavailability of DSO and payables data limits a comprehensive assessment of the company's overall working capital management and cost control effectiveness.

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Long-term

Grid Dynamics Holdings Inc's fixed asset turnover ratio has shown fluctuations over the past few years, with a general increasing trend from March 2020 to September 2022, peaking at 45.68 in September 2020. However, the ratio dropped significantly in December 2020 to 27.18 before recovering and stabilizing around 30-40 range in the following periods. The company experienced a decline in fixed asset turnover in December 2022 to 21.53, followed by an increase to 36.10 in March 2023, showing some volatility in the management of fixed assets efficiency.

On the other hand, the total asset turnover ratio has also been fluctuating, varying between 0.57 to 0.98 over the same period. The ratio decreased to 0.57 in September 2021 before gradually recovering and hovering around 0.76 to 0.88 from March 2022 to June 2023. Subsequently, the total asset turnover ratio remained relatively stable at 0.72 to 0.74 from September 2023 to June 2024, indicating a consistent level of asset utilization efficiency.

Overall, the trends in both fixed asset turnover and total asset turnover ratios suggest that Grid Dynamics Holdings Inc has been actively managing its assets to generate revenues efficiently, although there have been some periods of volatility and fluctuation in these ratios. Monitoring and improving asset turnover ratios can help the company optimize its asset utilization and enhance operational efficiency in the long term.