Harmony Biosciences Holdings (HRMY)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 55.84 | 62.98 | 62.78 | 46.47 | 34.83 |
| Receivables turnover | 8.61 | 7.40 | 7.66 | 7.32 | 6.07 |
| Payables turnover | 29.24 | 19.05 | 71.25 | 205.76 | 52.09 |
| Working capital turnover | 1.77 | 1.91 | 1.30 | 1.11 | 1.05 |
The inventory turnover ratio for Harmony Biosciences Holdings has shown a consistent increasing trend over the years, from 34.83 in 2020 to 55.84 in 2024. This indicates that the company is efficiently managing its inventory, converting it into sales more frequently.
The receivables turnover ratio has also been increasing steadily, reflecting the company's ability to collect payments from its customers efficiently. It has risen from 6.07 in 2020 to 8.61 in 2024, indicating a shorter collection period for receivables.
However, the payables turnover ratio, after a significant spike in 2021, has been fluctuating, indicating varying payment terms with suppliers. It went from 52.09 in 2020 to 29.24 in 2024. A lower ratio could suggest that the company is taking longer to pay its suppliers.
The working capital turnover ratio has shown an increasing trend over the years, from 1.05 in 2020 to 1.77 in 2024. This suggests that the company is efficiently utilizing its working capital to generate revenue.
Overall, based on the activity ratios, Harmony Biosciences Holdings appears to be managing its inventory and receivables efficiently, although there may be room for improvement in managing payables effectively to optimize cash flow.
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 | 6.54 | 5.80 | 5.81 | 7.85 | 10.48 |
| Days of sales outstanding (DSO) | days | 42.40 | 49.34 | 47.68 | 49.85 | 60.09 |
| Number of days of payables | days | 12.48 | 19.16 | 5.12 | 1.77 | 7.01 |
Based on the provided data for Harmony Biosciences Holdings' activity ratios, we can analyze the following:
1. Days of Inventory on Hand (DOH):
- The company's DOH has shown a declining trend over the years, decreasing from 10.48 days on December 31, 2020, to 6.54 days on December 31, 2024.
- This indicates that the company has been more efficient in managing its inventory levels, possibly by improving inventory turnover and reducing excess inventory holding costs.
2. Days of Sales Outstanding (DSO):
- Harmony Biosciences Holdings has managed to reduce its DSO from 60.09 days on December 31, 2020, to 42.40 days on December 31, 2024.
- The decreasing trend in DSO implies that the company has been successful in collecting its accounts receivable faster, which could enhance its cash flow and liquidity position.
3. Number of Days of Payables:
- The number of days of payables for the company has been fluctuating, moving from 7.01 days on December 31, 2020, to 12.48 days on December 31, 2024.
- This increase in days of payables suggests that Harmony Biosciences Holdings has taken longer to pay its suppliers over the years, potentially indicating changes in payment terms or supplier relationships.
Overall, the company has shown improvements in managing its inventory and accounts receivable efficiently, but there have been fluctuations in the management of payables. Further analysis can be conducted to understand the impact of these changes on the company's working capital and overall financial performance.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 568.60 | 1,478.43 | 731.34 | 311.10 | 143.59 |
| Total asset turnover | 0.72 | 0.68 | 0.62 | 0.59 | 0.32 |
Long-term activity ratios, such as Fixed Asset Turnover and Total Asset Turnover, provide insights into how efficiently a company is utilizing its assets to generate sales revenue.
1. Fixed Asset Turnover:
- Harmony Biosciences Holdings has shown a significant improvement in the Fixed Asset Turnover ratio from 143.59 in 2020 to 568.60 in 2024. This indicates that the company is generating a higher amount of sales revenue per dollar of fixed assets invested.
- The steep increase over the years suggests that Harmony Biosciences Holdings has been able to enhance its operational efficiency and utilization of fixed assets more effectively to drive revenue growth.
2. Total Asset Turnover:
- The Total Asset Turnover ratio of Harmony Biosciences Holdings has also shown a positive trend, increasing from 0.32 in 2020 to 0.72 in 2024. This indicates that the company is generating more sales revenue relative to its total assets.
- The improvement in this ratio suggests that Harmony Biosciences Holdings has been successful in efficiently utilizing its total assets to drive revenue generation, which is a positive indicator of overall operational efficiency and financial performance.
In conclusion, based on the analysis of these long-term activity ratios, Harmony Biosciences Holdings has demonstrated a strong ability to efficiently utilize both fixed and total assets to generate sales revenue, which is indicative of effective management of resources and operational performance over the years.