Heidrick & Struggles International (HSII)

Short-term

Turnover ratios

The activity ratios of Heidrick & Struggles International provide insights into how efficiently the company manages its resources to generate revenue.

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period.
- Heidrick & Struggles' inventory turnover has shown fluctuations over time, indicating changes in the efficiency of inventory management.
- The ratio has generally increased from March 2020 to December 2023, peaking at 40.04 in December 2021, suggesting a faster inventory turnover.
- The latest available data for December 2024 shows a significant drop in the inventory turnover to 19.47 compared to the previous period, which may require further investigation to understand the reasons behind this decline.

2. Receivables Turnover:
- The receivables turnover ratio reflects how effectively a company collects payments from its customers.
- Heidrick & Struggles' receivables turnover has fluctuated over the years, indicating changes in the efficiency of collecting receivables.
- The ratio has generally shown an increasing trend from March 2020 to December 2024, with occasional fluctuations.
- The latest data for December 2024 shows an increase in the receivables turnover to 8.31, indicating a more efficient collection of receivables compared to the previous period.

3. Payables Turnover:
- The payables turnover ratio evaluates how quickly a company pays its suppliers for goods and services.
- Heidrick & Struggles' payables turnover has varied over time, reflecting changes in the payment terms with suppliers.
- The ratio has shown fluctuations but generally remained within a certain range from March 2020 to December 2024.
- The latest data for December 2024 shows a payables turnover of 42.97, suggesting that the company takes approximately 42.97 days to pay its suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio indicates how efficiently a company utilizes its working capital to generate revenue.
- Heidrick & Struggles' working capital turnover has fluctuated over the years, reflecting changes in working capital management.
- The ratio has shown variations but generally exhibited an increasing trend from March 2020 to March 2023, indicating improved efficiency in utilizing working capital.
- The data for December 2024 shows a working capital turnover of 3.85, suggesting that the company generated approximately $3.85 in revenue for each dollar of working capital invested.

In summary, analyzing Heidrick & Struggles International's activity ratios provides valuable insights into its operational efficiency and effectiveness in managing inventory, receivables, payables, and working capital. Monitoring these ratios over time can help identify trends, pinpoint areas for improvement, and make informed decisions to enhance overall performance.

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Average number of days

The activity ratios for Heidrick & Struggles International reflect its operational efficiency in managing its working capital and cash flow cycle.

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days worth of inventory the company holds. Heidrick & Struggles has shown a decreasing trend in this ratio from around 25 days to about 10 days by the end of 2024. This suggests the company has been able to manage its inventory levels more efficiently over time, potentially reducing carrying costs and minimizing the risk of obsolete inventory.

2. Days of Sales Outstanding (DSO):
- The DSO metric indicates the average number of days it takes for the company to collect on its sales. Heidrick & Struggles experienced fluctuations in DSO over the years, ranging from around 60 days to 90 days. The decreasing trend toward the end of 2024 to under 50 days indicates an improvement in the company's ability to collect payments from customers more quickly, which is beneficial for cash flow management.

3. Number of Days of Payables:
- This ratio represents how long the company takes to pay its suppliers. Heidrick & Struggles maintained its payables around 5 to 8 days in recent years. A lower number of days indicates the company is efficiently managing its payables, possibly negotiating favorable payment terms with suppliers and optimizing its cash utilization.

In summary, Heidrick & Struggles International has shown improvement in managing its inventory, receivables, and payables, indicating a more effective working capital management strategy and potentially contributing to enhanced liquidity and operational efficiency.

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Long-term

The Fixed Asset Turnover ratio for Heidrick & Struggles International has fluctuated over the years, starting at 25.45 in March 2020 and peaking at 42.19 in September 2021. After reaching the peak, the ratio gradually decreased to 21.59 by December 2024. This ratio measures how efficiently the company is utilizing its fixed assets to generate sales revenue.

On the other hand, the Total Asset Turnover ratio reflects how efficiently the company is using all its assets to generate revenue. In the case of Heidrick & Struggles International, this ratio started at 0.91 in March 2020, increased to 1.23 by March 2022, and then fluctuated around 1.0 until December 2024.

Overall, these ratios indicate that Heidrick & Struggles International has been reasonably efficient in utilizing both fixed and total assets to generate sales revenue over the years, although there have been fluctuations in performance. Investors and analysts may further assess the company's operational effectiveness and asset management strategies based on the trends observed in these long-term activity ratios.