Gogo Inc (GOGO)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.45 | 1.83 | 2.39 | 7.47 | 4.99 |
| Receivables turnover | 7.88 | 7.12 | 4.64 | 3.59 | 6.39 |
| Payables turnover | 5.68 | 6.64 | 4.72 | 19.08 | 32.00 |
| Working capital turnover | 1.57 | 1.61 | 3.00 | 1.93 | 3.76 |
Based on the provided activity ratios for Gogo Inc over the past five years, we can observe the following trends:
1. Inventory Turnover:
- Gogo Inc's inventory turnover has been declining over the years, indicating that the company is selling its inventory at a slower pace compared to previous periods. This might imply inefficiency in managing and selling its inventory.
2. Receivables Turnover:
- The receivables turnover ratio has fluctuated over the years but generally shows that Gogo Inc is collecting its accounts receivable faster, as the ratio has been trending downwards. This could imply effective credit control and/or timely collection efforts.
3. Payables Turnover:
- Gogo Inc's payables turnover shows variations year-to-year. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which could indicate favorable credit terms or efficient management of payables.
4. Working Capital Turnover:
- The working capital turnover ratio has also been fluctuating over the years. A higher ratio indicates that Gogo Inc is generating sales efficiently with respect to its working capital. The decrease in this ratio over time suggests a reduction in the efficiency of generating sales using its working capital.
Overall, the analysis of these activity ratios indicates areas where Gogo Inc may need to focus on improving efficiencies, such as managing inventory levels more effectively and optimizing the usage of its working capital to generate sales. Additionally, the company's positive trend in receivables turnover and fluctuations in payables turnover may indicate effective management of receivables and payables, respectively.
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 | 252.38 | 199.42 | 152.66 | 48.84 | 73.08 |
| Days of sales outstanding (DSO) | days | 46.32 | 51.24 | 78.69 | 101.77 | 57.16 |
| Number of days of payables | days | 64.28 | 54.98 | 77.29 | 19.13 | 11.41 |
Gogo Inc's activity ratios provide insight into how efficiently the company manages its inventory, collects its receivables, and pays its payables. The Days of Inventory on Hand (DOH) ratio has been increasing over the past five years, indicating that the company is holding onto its inventory for a longer period before selling it. This trend may suggest potential issues with inventory management or slowing sales.
The Days of Sales Outstanding (DSO) ratio measures how quickly the company collects its receivables. The DSO ratio has fluctuated over the years but has generally increased, indicating that it takes the company longer to collect payments from customers. This could be a sign of changing customer payment habits or potential credit risks.
On the other hand, the number of days of payables has also increased over the years, suggesting that Gogo Inc is taking longer to pay its suppliers. While delaying payments can improve cash flow in the short term, it may strain relationships with suppliers and impact future purchasing agreements.
Overall, the activity ratios of Gogo Inc show a mixed performance in managing its inventory, receivables, and payables. The company may need to reassess its inventory management strategies, streamline collection processes, and ensure timely payments to suppliers to enhance operational efficiency and maintain healthy relationships with stakeholders.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.87 | 3.69 | 2.89 | 2.25 | 9.35 |
| Total asset turnover | 0.49 | 0.51 | 0.28 | 0.21 | 0.53 |
The fixed asset turnover ratio for Gogo Inc has been relatively stable over the past five years. It increased from 1.49 in 2019 to 5.27 in 2021, indicating that the company was able to generate more sales revenue for each dollar invested in fixed assets. However, it decreased slightly to 4.05 in 2023, suggesting a slightly lower efficiency in utilizing fixed assets to generate sales.
On the other hand, the total asset turnover ratio for Gogo Inc has fluctuated over the same period. It was highest in 2020 at 0.53 and lowest in 2019 at 0.69. The ratio measures the company's ability to generate sales revenue in relation to its total assets. A lower total asset turnover ratio may indicate that the company is not effectively utilizing its assets to generate sales.
Overall, while the fixed asset turnover ratio shows a relatively positive trend, with a slight dip in the most recent year, the total asset turnover ratio has been more volatile. It is essential for Gogo Inc to closely monitor and assess its asset utilization to ensure optimal efficiency and productivity in the long term.