Gen Digital Inc. (GEN)

Short-term

Turnover ratios

The activity ratios of Gen Digital Inc. provide insights into the company's efficiency in managing its assets and liabilities.

1. Inventory Turnover:
- The inventory turnover ratio has shown a fluctuating trend over the years, starting at a relatively low level of 0.89 in June 2020 and gradually increasing to peak at 33.05 in September 2023.
- A sudden drop to 5.01 in December 2023 followed by missing data in the subsequent periods might indicate issues with inventory management that need attention.
- In the latest available data, the ratio has stabilized around 7.03, suggesting improved efficiency in selling its inventory.

2. Receivables Turnover:
- The receivables turnover ratio has shown variability but generally remained within a reasonable range, reflecting the company's ability to collect receivables efficiently.
- The ratio ranged from 10.26 in December 2020 to a high of 24.67 in June 2023, indicating effective management of accounts receivable.
- Overall, the company seems to have a consistent approach to collecting receivables, with the ratio standing at 23.50 in June 2024.

3. Payables Turnover:
- The payables turnover ratio reflects how quickly the company pays its suppliers. The ratio decreased initially, reaching a low of 4.79 in September 2021 but then increased to 11.83 by March 2024.
- The increase in the ratio may signify a delay in payment to suppliers, potentially affecting relationships or indicating liquidity issues.
- In the latest data available, the payables turnover ratio stands at 9.18 in March 2025, suggesting the company has improved its payment management compared to the previous periods.

4. Working Capital Turnover:
- The working capital turnover ratio provides insights into how effectively the company utilizes its working capital to generate sales. In this case, there is missing data for most periods.
- The available data shows the ratio at 92.33 in December 2020, indicating that the company generated $92.33 of revenue for every dollar of working capital.
- Lack of data for subsequent periods limits a comprehensive analysis of the company's working capital efficiency.

In conclusion, Gen Digital Inc. demonstrates varying levels of efficiency in managing its inventory, receivables, and payables, as indicated by the fluctuations in its activity ratios over the years. The company's ability to improve these ratios over time reflects its efforts to enhance operational efficiency and financial performance.

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Average number of days

Gen Digital Inc.'s activity ratios provide insight into how efficiently the company manages its working capital and operations:

1. Days of Inventory on Hand (DOH):
- The DOH decreased significantly over the years, indicating an improvement in managing inventory levels.
- A decreasing trend suggests the company is selling its products faster, reducing the need for excess inventory and potential obsolescence.
- The steep decline from 410.39 days on June 30, 2020, to 12.06 days on June 30, 2023, and a subsequent plateau with slight fluctuations until March 31, 2025, indicate effective inventory management strategies.

2. Days of Sales Outstanding (DSO):
- The DSO measure shows a fluctuating but overall decreasing trend, which indicates the company is collecting its accounts receivables more promptly.
- A lower DSO signifies efficient credit and collection policies, improving cash flow and reducing the risk of bad debts.
- The DSO decreased from 24.54 days on June 30, 2020, to 15.86 days on March 31, 2025, indicating effective credit management practices.

3. Number of Days of Payables:
- The trend for the number of days of payables shows a fluctuating but general decreasing pattern, reflecting the company's ability to manage its trade payables effectively.
- A decrease in days payables suggests the company is paying its suppliers more quickly, which can improve supplier relationships and possibly lead to favorable terms.
- The decrease from 56.74 days on June 30, 2020, to 39.76 days on March 31, 2025, indicates a more efficient use of trade credit without straining the company's cash flow.

In summary, Gen Digital Inc. has shown improvements in managing its inventory, collecting receivables, and paying its suppliers over the years. These trends suggest that the company is operating more efficiently and effectively utilizing its working capital to support its business operations.

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Long-term

Gen Digital Inc.'s long-term activity ratios show positive trends in both fixed asset turnover and total asset turnover.

The fixed asset turnover ratio has been steadily increasing over the years, indicating that the company is generating more revenue per dollar invested in fixed assets. This trend suggests that Gen Digital Inc. is effectively utilizing its fixed assets to generate sales and improve operational efficiency.

On the other hand, the total asset turnover ratio initially fluctuated but showed a general increasing trend from June 30, 2022, onwards. This improvement suggests that the company is generating more revenue relative to its total assets. However, there was a significant drop in total asset turnover from September 30, 2022, to December 31, 2022, before starting to recover and stabilize at a higher level.

Overall, the increasing trends in both fixed asset turnover and total asset turnover ratios indicate that Gen Digital Inc. is efficiently managing its assets to generate sales and improve overall operational performance over the long term.