Gen Digital Inc. (GEN)
Activity ratios
Short-term
Turnover ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 19.00 | 7.29 | 1.55 | 1.46 |
| Receivables turnover | 11.31 | 11.47 | 18.04 | 11.98 | 9.54 |
| Payables turnover | 11.08 | 7.65 | 6.48 | 6.96 | 4.52 |
| Working capital turnover | — | — | — | — | 5.45 |
Gen Digital Inc.'s activity ratios provide insight into how effectively the company manages its resources and operates its business.
1. Inventory Turnover:
- Gen Digital Inc.'s inventory turnover has seen a significant improvement over the past five years, indicating that the company is managing its inventory more efficiently.
- In 2023, the ratio was 19.00, representing a substantial increase from previous years. This suggests that the company is selling its inventory more rapidly.
2. Receivables Turnover:
- The receivables turnover ratio measures how quickly the company collects its accounts receivables.
- Gen Digital Inc. has maintained a relatively stable receivables turnover over the past five years, with the ratio fluctuating around the 11 to 18 range.
- A higher turnover ratio indicates that the company is collecting its receivables more quickly, which can improve cash flow.
3. Payables Turnover:
- The payables turnover ratio reflects how efficiently the company manages its accounts payables.
- Gen Digital Inc. has shown consistent improvement in payables turnover over the years, with the ratio rising from 4.52 in 2020 to 11.08 in 2024.
- A higher payables turnover ratio suggests that the company is taking longer to pay its suppliers, which can improve liquidity.
4. Working Capital Turnover:
- Working capital turnover ratio is calculated by dividing net sales by average working capital.
- The data provided does not include information for working capital turnover for Gen Digital Inc., which limits the analysis of how efficiently the company utilizes its working capital.
Overall, Gen Digital Inc. has shown positive trends in its activity ratios, particularly in inventory turnover and payables turnover, indicating improved efficiency in managing inventory and paying suppliers. Collectively, these ratios suggest that the company is effectively managing its resources and operations.
Average number of days
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 19.21 | 50.10 | 234.93 | 250.76 |
| Days of sales outstanding (DSO) | days | 32.27 | 31.82 | 20.23 | 30.48 | 38.26 |
| Number of days of payables | days | 32.95 | 47.72 | 56.36 | 52.43 | 80.80 |
Gen Digital Inc.'s activity ratios provide insight into how efficiently the company manages its assets and cash flow.
1. Days of Inventory on Hand (DOH):
- The trend shows a significant improvement in 2023 compared to 2022 and 2021.
- In 2024, the DOH figure is not provided, indicating a potential change in inventory management.
- Lower DOH values suggest that the company is managing its inventory more efficiently by reducing the time it takes to turn inventory into sales.
2. Days of Sales Outstanding (DSO):
- The DSO metric fluctuates over the years but has generally remained stable.
- A lower DSO indicates that Gen Digital is collecting its accounts receivable more quickly, improving its cash flow.
- The DSO in 2022 and 2024 is higher, possibly due to changes in the company's credit policies or customer payment behavior.
3. Number of Days of Payables:
- Gen Digital has been effectively managing its payables as the number of days payable has decreased gradually over the years.
- A lower number of days of payables indicates that the company is taking longer to pay its suppliers, potentially improving its liquidity position.
- This trend may suggest that the company is strategically balancing its payables without causing strain on its relationships with suppliers.
Overall, Gen Digital Inc. has shown improvements in managing its inventory and payables efficiently, which could positively impact its working capital management and overall financial health. Monitoring these activity ratios over time will be crucial to assess the company's operational performance and financial sustainability.
Long-term
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 52.94 | 43.92 | 46.60 | 32.71 | 10.46 |
| Total asset turnover | 0.24 | 0.21 | 0.40 | 0.40 | 0.32 |
Gen Digital Inc.'s long-term activity ratios reveal a positive trend in efficiency in utilizing fixed assets over the years. The fixed asset turnover ratio has been consistently increasing from 10.46 in 2020 to 52.94 in 2024, indicating that the company is generating more revenue per dollar of fixed assets invested. This suggests that Gen Digital Inc. has been effectively managing and utilizing its fixed assets to generate sales.
On the other hand, the total asset turnover ratio has shown some fluctuations over the years, reaching its peak at 0.40 in both 2022 and 2023 before declining to 0.24 in 2024. This ratio indicates the company's ability to generate sales relative to its total assets. Although there have been fluctuations, the overall trend shows a reasonable level of efficiency in utilizing total assets to generate revenue.
In conclusion, based on the long-term activity ratios, Gen Digital Inc. has effectively improved its efficiency in utilizing fixed assets to generate revenue, while also demonstrating a reasonable level of total asset turnover. Continued monitoring of these ratios will be important to assess the company's ongoing operational effectiveness and asset utilization.