Gilead Sciences Inc (GILD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.66 | 3.25 | 2.01 | 2.41 | 1.52 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 4.01 | 5.64 | 6.84 | 7.92 | 5.59 |
Gilead Sciences Inc Activity Ratios Analysis:
1. Inventory Turnover: The inventory turnover ratio measures how efficiently a company manages its inventory. Gilead Sciences Inc has shown an increasing trend in this ratio from 1.52 in 2020 to 3.66 in 2024. This indicates that the company is selling its inventory more quickly in recent years, which is a positive sign as it reduces the risk of inventory obsolescence and carrying costs.
2. Receivables Turnover: The receivables turnover ratio reflects how effectively a company collects cash from its credit sales. In this case, the data shows that Gilead Sciences Inc did not report any figures for receivables turnover from 2020 to 2024. This lack of information limits our ability to assess the company's efficiency in collecting receivables.
3. Payables Turnover: The payables turnover ratio measures how efficiently a company pays its suppliers. Similar to the receivables turnover, Gilead Sciences Inc did not provide any data on payables turnover for the years 2020 to 2024. Without this information, it is challenging to evaluate the company's payment practices to suppliers.
4. Working Capital Turnover: The working capital turnover ratio indicates how efficiently a company utilizes its working capital to generate sales. Gilead Sciences Inc's working capital turnover ratio has fluctuated over the years, from 5.59 in 2020 to 4.01 in 2024. This implies that the company's efficiency in generating sales from its working capital has slightly decreased during this period.
In conclusion, while Gilead Sciences Inc has shown improvements in inventory turnover, the lack of information on receivables and payables turnovers limits a comprehensive assessment of the company's overall activity ratios. The varying trend in working capital turnover suggests the need for further analysis to understand the company's operational efficiency and liquidity management.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 99.85 | 112.38 | 181.95 | 151.18 | 240.62 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Gilead Sciences Inc, we can analyze the activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- The days of inventory on hand measures how many days it takes for a company to sell its entire inventory.
- In December 31, 2020, Gilead Sciences had 240.62 days of inventory on hand, which decreased to 99.85 days by December 31, 2024.
- A lower number of days of inventory on hand is generally considered positive as it indicates that the company is able to sell its inventory more quickly.
2. Days of Sales Outstanding (DSO):
- Unfortunately, the data provided did not include values for Days of Sales Outstanding for Gilead Sciences Inc. DSO measures the average number of days it takes a company to collect its accounts receivable.
- A lower DSO is preferable as it indicates that the company is collecting payments from its customers more quickly.
3. Number of Days of Payables:
- Similar to DSO, the data did not include values for the Number of Days of Payables for Gilead Sciences Inc. This ratio reflects how long it takes a company to pay its suppliers.
- A higher number of days of payables can sometimes indicate favorable terms with suppliers, but it could also suggest liquidity issues if payments are being delayed excessively.
In conclusion, the decreasing trend in the days of inventory on hand for Gilead Sciences Inc from 2020 to 2024 is a positive indication of effective inventory management. However, without data for DSO and the number of days of payables, a comprehensive analysis of the company's overall efficiency in managing its working capital cannot be provided.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 4.98 | 5.33 | 4.97 |
| Total asset turnover | 0.49 | 0.44 | 0.43 | 0.40 | 0.36 |
The Fixed Asset Turnover ratio for Gilead Sciences Inc has shown a slight increase over the years, from 4.97 in 2020 to 5.33 in 2021, before slightly decreasing to 4.98 in 2022. The ratio indicates that the company generated $5.33 in revenue for every dollar invested in fixed assets in 2021.
On the other hand, the Total Asset Turnover ratio has been steadily increasing, from 0.36 in 2020 to 0.49 in 2024. This suggests that the company has been more efficient in generating sales in relation to its total assets over the years, with an improvement in utilization of its assets to generate revenue.
Overall, these trends indicate that Gilead Sciences Inc has been effectively utilizing both its fixed and total assets to generate sales, with a particularly notable improvement in the efficiency of total asset utilization over the period analyzed.